Description
Business-to-business (B2B) describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer.
MBA UNILEVER PROJECT REPORT
APPRAISAL OF UNILEVERs B2B SERVICING PERFORMANCE
Report by: Winnie Muriithi (Executive MBA student, University of Warwick) E-mail: [email protected] T (M): + 44 75011 62134.
Executive summary
It has often been argued that World Class service organisations tend to have impressive business results, both financial and non-financial. This report documents research findings of three project objectives framed within this widely held tenet: (a) To determine if Employee Capability & Continuity correlate with Customer Case Fill On Time (CCFOT) and On-Shelf Availability (OSA) (both internal Unilever customer service measures) and (b) To determine the metrics that define World Class Service in a B2B environment (c) To benchmark servicing performance against best-in-class supply chain excellent firms Based on data collated by Institute of Customer Service on Mexico and USA, the research uncovered that; i. ii. CCFOT increases with service capability & continuity and service credibility & commitment, CCFOT improves On-Shelf (which in known to directly impact sales revenues through OSA).
Review of case studies, academic and company reports revealed a lifecycle construct underpinned by three lifecycle stages towards realising world class service status; Foundation, Developing and World Class. Appraisal of customer service performance using; internal, Cannondale and Advantage surveys revealed a geographical split between service perception of UK and USA customers, improvement of employee service continuity and opportunities for improving customer-supplier team working, and service consistency related to promotions. The world class service benchmarking exercise confirmed the role of supplier-customer shared platforms and customer value management in underpinning supply chain excellence. It also revealed that the latter is not contingent upon service excellence in all B2B servicing metrics but rather, leadership in majority of the servicing metrics.
End of Project Report
Chapter 1: Introduction Research demonstrating the causal-effect links between customer service and financial performance in B2C organisations has been widely reported leading to frameworks such as the service profit chain (that describes the virtuous link between profit and world class service), developed by Prof. Hesketh.1 (Appendix I). The profit chain was reframed to generate the Unilever customer value chain (Schematic I) based on the PSO framework pillars and Unilever Customer Service KPIs (described in Appendices II and III, respectively).
Schematic I: Unilever customer service performance value chain linking people, systems & processes and organisation to sales revenue
1.1 Research Goal Defined
Four fundamental questions underpinned the project’s research goal; (a) What is the impact of culture (defined by people and organisation (in the PSO framework)) on the customer value chain? (b) Which metrics define world class service in a B2B environment? (c) How do Unilever strategic customers perceive customer service performance? (d) What are the service hallmarks of companies featuring in AMR’s best-in-class supply chain rankings?
Heskett, J. L., Sasser, W. E. Jr and Schlesinger, L. A. (1997), The Service Profit Chain: How leading Companies Link Profit and Growth to Loyalty, Satisfaction and Value, Free Press, New York, NY. W. Muriithi (February 2010) 2|P a g e
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1.2 Research methodology
Research on the metrics that shape and inform world class service in a B2B environment entailed distillation of published literature, AMR research and Institute of Customer Services’ reports, augmented by interviews with academic thought leaders and AMR research experts. ICS ServCheck data collected between Q1 and Q2’09 was retrieved from ICS data archives. Customer service KPIs data (CCFOT, OSA and constituent loss tree components) for April, May and June was averaged to derive single Q2 2009 values. Statistical analysis was performed using JMP (a visual and interactive interface to SAS)2. The software enables one to interactively link data spreadsheets with analysis and display graphics, to derive data associations and trends. Both multivariate and univariate statistical analysis approaches were used to generate correlation graphs.
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Chapter 2: Results & Discussion
2.1 Objective 1: To determine if Employee Capability & Continuity correlate with Customer Case Fill On Time (CCFOT) and On-Shelf Availability (OSA)
The correlations existing between the customer service KPIs (CCFOT and OSA), people KPIs (capability and continuity) and sales revenue are summarised in the schematic below.
Correlations between ICS ServCheck people scores, Customer Service KPIs (CCFOT and OSA) and sales revenue. +ve correlation indicates that increasing the value of one relation improves the other, -ve correlation signifies that increasing the value of one decreases the other. Further analyses of the correlations between the Organisation pillar (defining service commitment and credibility) were also progressed. The inferences drawn from all the correlations are summarised in the table below.
KPI People Capability/ Continuity Organisation Credibility/ Commitment
Data source ICS ServCheck UL dashboard (USA and Mexico data) ICS ServCheck UL Dashboard (USA and Mexico data)
Inferences Improving service capability and continuity improves: • • CCFOT by 1:0.9 (capability:CCFOT) CCFOT by 1:1 (continuity:CCFOT)
Improving an organisation’s service credibility and continuity improves: • CCFOT by 1.9:1 (commitment: CCFOT) above a commitment score of 40 • CCFOT by 2.19:1 (credibility: CCFOT) above a credibility score of 45
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CCFOT CCFOT OSA
UL dashboard Pre-determined Pre-determined
Increasing CCFOT improves On Shelf Increasing CCFOT improves sales by a ratio of 11:1 Increasing OSA improves sales by a ratio of 3:1
2.2 Objective 2: To determine the metrics which define World Class Service in a B2B environment
Review of published literature and organisation reports revealed that the B2B customer service metrics are largely anecdotal. To address hte paucity of empirical and practice data in this area, the research focused on two objectives; a) Distilling antecedents and premises reported on B2C organisations operating offering world class to construct a service maturity journey, b) Incorporating ‘a’ above into two interrelated operational excellence disciplines (as depicted in the schematic below); The Performance Pyramid and the Value Chain Leadership debates (discussed in greater detail in Appendix IV). Excellent service = delivering the promise+ providing a personal touch + going the extra mile+ resolving problems well Robert Johnston (WBS).
The Performance Pyramid (causal-effect relationships) Richard Lynch et al.
Value Chain Leadership (supply chain excellence) Debra Hofman (AMR research)
Synthesis of the concepts and debates advanced from the three perspectives allude to metrics for a B2B operating environment that are the result of a maturity journey across the three passages depicted in the schematic below.
The B2B organisation maturity journey towards World Class Customer service status
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Foundation level; the service provider delivers promises as per the agreed written contract, with no excesses beyond what is agreed. The service is, in the main, offering hygiene factors only. Developing level; here the service provider goes beyond delivering the basics by putting in place a signature recovery service. Management of this perspective determines whether the service provider tends to world class service status, as poor service recovery mechanisms have a profound adverse impact on perceived service quality. World Class Service; this is the pinnacle of service excellence and is underpinned by, firstly, delivery of the basics coupled to a signature service recovery. In addition, the service proposition nurtures shared customer-service provider platforms, leading to an opportunity for a distinct and branded service - the so-called, ‘service with a personality’. Creating an arena for co-engineering the service-product by drawing on one’s proximity to the service recipient, to shape and mould the service proposition, is, for a service provider, a unique and non replicable source of strategic advantage. When combined with first mover advantage, this strategy has been demonstrated to create B2C service excellent organisations such as Singapore Airlines.
2.3 Objective 3: To benchmark servicing performance against that of best-in-class supply chain excellent firms
Wal*Mart Customer Survey Customer views on Unilever performance were elicited from four senior leaders drawn from Wal*Mart International using the survey shown in Appendix V. The results have been analysed using the ImportancePerformance matrix mapping (see graph below), a powerful tool for appraising service performance because it explicitly includes ‘the customer voice’ concerning both service satisfaction and service importance.
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The results revealed two performance/importance clusters assignable to country – USA and UK (see graph below). The USA cluster falls within the appropriate weighting of both importance and satisfaction whilst UK scores are borderline (averaging 5 for both importance and performance). A notable exception to this general rule of thumb is the perception by customers that staff servicing competence (highlighted in black), leaves room for improvement confirming the need for immediate corrective action to remedy performance shortfall. USA Cannondale & UK Advantage surveys Data on category and supply chain management from Cannondale and Advantage3 surveys has been used to augment the insights of the customer survey reported above. Detailed responses are captured in Appendix VI, with a snapshot of the verbatim provided in the table below.
World Class Service maturity dimension Service personality Customer performance appraisal verbatim I’ve asked them (Unilever) to be a little bit more flexible, earlier collaboration, being more open and not so policy driven. Sometimes we’ve had discussion and it is a policy to policy situation – my company says this way and mine says this, and that’s frustrating.” (Cannondale) Service personality ‘Our overall business relationship with Unilever (H&B) has been good historically. However, we have had some challenges that we have put to them which have not always been met with enthusiasm and the willingness to work with us.’ (Advantage) Shared platforms “I would say that overall Unilever’s shopper marketing programs are pretty effective. I would rank them tied with P&G. One of the things that I think is an advantage for Unilever is that they are more open with the information that we share with them and their analysis of it. Sometimes I feel like we need to pull the information out of P&G.” (Cannondale) Shared platforms ‘‘In terms of promotions, Unilever Household are hit and miss. Sometimes, if we have just had a meeting they will give us loads of details of how to help us, but for other promotions we will be left to our own devices, so it is not really consistent.’ (Advantage) Delivering basics/ recovery the ‘We do have issues with Unilever's (H&B) supply chain management. One issue is underservice forecasting, and a lot of the time when either we or the traders challenge them it sometimes feels like they forecast based on the stock they can deliver to us rather than what they think we are going to sell. Recovery times are probably the other issue; it feels quite long in terms of recovery times. Depending on what it is depends on how quick they are to replenish, but it feels like they don't recover as quickly as some other suppliers. (Advantage) Delivering basics the “Three or four years ago their churn was so bad that it actually got confrontational with us. They have made a lot of progress since then.” The ability to make decisions quickly is paramount. Unilever has gotten better here, but they are still lagging behind across the board.” (Cannondale)
The Cannondale and Advantage groups are research consultancy practices based in USA and UK respectively that collate proprietary and extensive qualitative and quantitative market data on business critical performance dimensions of FMCGs and retailers. W. Muriithi (February 2010) 7|P a g e
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The customer responses substantiate the shortfalls noted from the Wal*Mart survey, underlining the need for corrective action in the following performance areas: (i) Service personality; there is an unmet need of service flexibility and collaboration which is attributable to bureaucracy and lack of trust. (ii) Shared platforms; comment (i) echoes the assessment of this perspective that, in the main, whilst information sharing between Unilever and USA customers is rated highly, there is a need to increase consistency in other areas such as promotions in the UK. (iii) Delivering the basics; this perspective attracted mixed responses with UK customers highlighting forecasting and service recovery deficits, and USA customers acknowledging significant improvements especially with respect to staff capability. In summary, the three surveys confirm a geographical split between service perception of UK and USA customers, extremities of poor customer service interlaced with an acknowledgement of progress in staff continuity and capability. Servicing (Organisation & People) within the Top50 Supply Chain Excellent firms Benchmarking of people/ organisation servicing metrics of a select group of firms drawn from AMR research Top50 supply chain rankings, are summarised in the table below.
The research revealed that firms ranked 20 and above;
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a) Are on average leading-edge in customer value management either as mainstream activities or as part of account management. These firms are also fanatical about supply chain health by having in place supply chain health sensors. b) Have, with the exception of P&G, supplier-customer collaboration platforms. These include (but are not limited to); channel alignment activities such as vendor managed inventories, electronic data interchange (EDI), echelon-based inventory control and continuous replenishment programs. c) Combine (with the exception of Colgate), customer, partner, and internal insights to identify innovations that address true market needs. The research also uncovered that firms positioned below 22 in the rankings have, in the main; i) no supplier-customer supply chain collaborative activities, product design & development servicing and supply chain health metrics, and ii) are moderate/ at par performers across majority of the servicing metrics,
All firms use downstream data mining to deliver their services suggesting that the latter is a hygiene factor, rather than a source of competitive advantage.
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Chapter 3: Conclusions (i) Recruiting and developing people against competencies that give high priority to customer-focused attitudes, and using retention, reward and recognition strategies that are focused on world-class service, improves CCFOT. • • (ii) By 1:0.9 (Capability:CCFOT) By 1:1 (Continuity:CCFOT)
Defining service quality as a key corporate value with associated goals, action programmes and measurement and top-level accountabilities, and ensuring that promises are kept and superb service recovery systems are in place, improves CCFOT. • • By 1.9:1 (commitment: CCFOT) based on a minimum ICS ServCheck commitment score of 40 By 2.19:1 (credibility: CCFOT) based on a minimum ICS ServCheck credibility score of 45
(iii) Improving CCFOT improves On-Shelf which directly impacts OSA and therefore, sales revenues. The research mapped out the antecedents and premises relating to World Class Service credentials in a B2B operating environment. These postulate that attaining world class service credentials is a culmination of a maturity journey across three passages: foundation, developing and world class service stages, defined by the following metrics: delivers promises (contract), signature service recovery, shared (customer-supplier) supply chain platforms and service personality. Appraisal of customer service performance against the world class service framework revealed that whilst significant gains had been made in delivering employee service continuity, there remains significant performance deficits with respect to collaborative and flexible customer-supplier team working, and service consistency (especially during promotions). The world class service benchmarking exercise confirmed the role of supplier-customer shared platforms and customer value management in underpinning supply chain excellence. It also revealed that the two practices are necessary but not sufficient for attaining world class service status, in B2B operating contexts.
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APPENDIX I: SERVICE PROFIT CYCLE
Research demonstrating the causal-effect links between customer service and financial performance in B2C organisations has been widely reported1-5. These studies have resulted into frameworks such as the ‘service profit chain’ (which describes the virtuous circle that links profit and growth to loyalty, satisfaction and value), and World Class Service (which describes the concept of a signature service that is a source of competitive advantage). The basic premise of the Service Profit Chain shown below is that employee (&customer) loyalty are linked to satisfaction which in turn drives profit and growth4. This proposition has been corroborated using data from B2C contexts including, notably, research on the four largest UK supermarkets5, UK retail banking6 and the American retail giant, Sears7.
Schematic 2: The service profit chain linking employee and customer satisfaction & loyalty to sales revenue
Heskett, J. L., Sasser, W. E. Jr and Schlesinger, L. A. (1997), The Service Profit Chain: How leading Companies Link Profit and Growth to Loyalty, Satisfaction and Value, Free Press, New York, NY. 5 Silvestro, R. (2002), International Journal of Operations & Production Management, Dispelling the modern myth, 22, (1) pp 30-49. 6 Loveman, G. W (1998), Journal of Service, Employee satisfaction, customer loyalty and financial performance: an empirical examination of the service profit chain in retail banking, 1, (1) pp 18-31 7 Rucci, A. J., Kirn, S. P. And Quinn, R. T., (1998), Harvard Business Review, The employee-customer-profit chain at Sears, January-February, pp 83-97. W. Muriithi (February 2010) 11 | P a g e
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APPENDIX II: THE INSTITITE OF CUSTOMER SERVICES PSO FRAMEWORK
The Institute of Customer Services (ICS) based in Colchester UK is a non-governmental organisation concerned with world-class service advocacy. From collaborative research with leading academic institutions, the organisation has accumulated a body of knowledge on world class service delivery, leading to the PSO framework (shown below in the schematic below). It’s guiding principle is that service delivery is the cumulative performance about three service pillars; people, systems & processes and organisation, each of which is shaped and informed by two component principles; capability & continuity, consistency & creativity and credibility & commitment, respectively.
Definition of the components is summarised in the table below. Pillar Organisation Principle Commitment Definition Service quality is a key corporate value, with associated goals, action programmes, measurement and top-level accountabilities Promises are kept and superb service recovery systems are in place People are recruited and developed against competencies that give high priority to customer-focused attitudes Retention, reward and recognition strategies focus on world-class delivery Processes are designed from a customer’s viewpoint and are consistently delivered Continuous improvement and innovation are nurtured and encouraged to flourish
Credibility Capability
People
Continuity Consistency
Systems & Processes
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APPENDIX III: UNILEVER SUPPLY NETWORK
Unilever Supply network is a complex interconnection of customer, supplier, and internal function values chains as depicted in the schematic below. The supply network underlines the multiplicity of potential instability positions, and the interdependencies between the three value chains: customer, product manufacturing and supplier. The effectiveness and efficiencies of the network determines the impact that Unilever products have on the supermarket shelf, on the consumer and ultimately, on sales revenue. Customer Value Chain During the last 5 years, Unilever’s Customer Value Chain (CVC) performance has assumed strategic importance following the launch of Unilever’s corporate strategy in 2005. Enshrined in this strategy was the thrust ‘Win with Customers’, which focuses on delivering best in class customer service through an efficient shopper-driven supply chain. Two principal KPIs have been launched to measure service performance; Customer Case Fill on Time (CCFOT)8 and On Shelf Availability (OSA)9.(see schematic below).
Unilever Supply Network and Customer Service KPIs (CCFOT and OSA) CCFOT This is the order to deliver process measure which is used alongside a Loss Tree tool that captures failures of delivering to customers on time. The aggregated total is 100% i.e., CCFOT% + Loss Tree % = 100% CCFOT = Total Cases Accepted by Customer On-Time/ Adjusted number of cases ordered Where adjusted cases ordered is defined as: Adjusted Number of Cases ordered = Revised Order + Order Changes
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Unilever Information Standard, Customer Casefill On Time – CCFOT, Version 1.1, June 2008 Unilever Information Standard, On Shelf Availability, Version 1.0, December 2008 W. Muriithi (February 2010) 13 | P a g e
Loss tree comprises level 1 measures of: stock availability, order management, warehouse & transportation, commercial issues on time, customer related issues and Force Majeure. OSA OSA is an in-store measure of the consumer units present (or absent) from a shelf space. Its subcomponents are: On-Shelf (OS), Out-Of-Stock (OOS) and VOID where; OS are the % consumer units (per listed consumer units), that can be found on the shelf at the time of audit, OOS are the % consumer units that have a shelf tag or are in the store catalogue, but do not have any inventory on shelf at the time of audit and VOID, is a circumstance where a consumer unit is included in the store assortment and is expected to be stocked, but at the time of audit there is no inventory of it nor a shelf tag or any reference in the store catalogue or retailer system. The three when aggregated give 100% i.e. OS% + OOS% + VOID% = 100% In-house research has established that increasing CCFOT by 11%, or OSA by 3%, leads to a 1% rise in sales10.
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Personal Communication with Customer Service Development (OSA program) Director, September 2009. W. Muriithi (February 2010) 14 | P a g e
APPENDIX IV: EVOLUTION OF THE SERVICE EXCELLENCE PYRAMID
The world class maturity pyramid was generated about three operations excellence disciplines: Excellent service = delivering the promise+ providing a personal touch + going the extra mile+ resolving problems well Service Excellence as postulated by Prof. Robert Johnston (Warwick Business School)11 is based on in-depth qualitative studies of Singapore Airlines, Sears, Roebuck and Co., British Airways, Shangri-La Hotels, First Direct, Disney, Virgin Atlantic, Tesco and RAC, and quantitative studies of 100 UK service organisations. Its basic premise is that service excellence is the cumulative result of delivering the promise, proving a personal touch, going the extra mile and resolving problems well. Performance Pyramid advanced by Lynch et al.12, advocates for constructs comprising measures that are interlinked to expedite decision making and allow robust interpretation of causal-effect relationships. Layering the measures also improves implementation efficacy whilst flagging improvement gaps needed for continuous process improvement. Value Chain leadership, advanced by AMR Research13, draws on a spider gram construct that depicts supply chain leadership as contingent upon four supply chain excellence levers; supply, product, demand and information. Effectiveness of these levers is reliant upon customer service behaviours and competencies such as: shared service, supply network focus, collaboration for joint value creation, integration of service into product design & development, service parts optimization and shared ownership & metrics.
The Performance Pyramid (causal-effect relationships)
Value Chain Leadership (supply chain excellence)
The Excellent Service paradigm draws primarily on data from B2C organisations and to achieve B2B contextual relevance, has been augmented by the Value Chain Leadership paradigm based on both B2B and B2C businesses.
Johnston, R. Clark, G. (2008) Service Operations Management, Pearson Education Limited, Harlow, England Lynch, Richard, L. And Kelvin, Cross, F. (1991), Measure Up! Yardsticks for Continuous Improvement, Blackwell, Oxford. 13 American Manufacturing Research (AMR in short) is a professional consultancy organisation based in Boston, USA who primary goal is to advance thought leadership and practice in supply chain excellence.
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APPENDIX V: CUSTOMER SURVEY QUESTIONNAIRE
UNILEVER CUSTOMER SERVICE EXCELLENCE SURVEY Please be as candid as possible as the questionnaires will be treated with the strictest confidence. The questionnaire should take no more than 10 minutes to complete. Country Affiliation Which country are you affiliated with?
United Kingdom
Functional Area In which functional area do you work? Commercial (contract negotiation and supplier management) Commercial (supply chain logistics and planning) Finance (accounts payable and invoicing) Retail Warehousing (goods dispatch, transportation and goods receipt) Other Primary Operating Hub Which is your primary operating hub? Corporate/ Business centre Distribution Centre Store Other Job Role Which of these categories best describes your job role? Senior Vice President Vice President Director 16 | P a g e W. Muriithi (February 2010)
Manager / Team Leader / Supervisor Assistant / Associate Other Importance On a scale of 1 (low) to 10 (high), how important are the following aspects of your relationship with Unilever?
1 Competence of staff Being treated as a valued customer Consistency of staff interactions On time delivery of contract / promises Resolution of problems and issues Quality of Information / advice Handling of enquiries Being consulted about product and service needs Ease of doing business with Other (If selected, please insert text) Satisfaction
2
3
4
5
6
7
8
9
10
On a scale of 1 (low) to 10 (high), how satisfied are you with the following aspects of your relationship with Unilever?
1 Competence of staff Being treated as a valued customer Consistency of staff interactions On time delivery of contract / promises Resolution of problems and issues
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3
4
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10
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Quality of Information / advice Handling of enquiries Being consulted about product and service needs Ease of doing business with Other (If selected, please insert text) Improving the relationship with you What (in your view) should Unilever (as an organization) do to improve its relationship with you personally?
Improving the relationship with XXXX What (in your view) should Unilever (as an organization) do to improve its relationship with XXXX?
Overall rating We'd like you to score the following items using a scale of 1 to 10, where 1 means "Completely disagree" and 10 means "Completely agree". If you have no experience relating to the comment please click the 'N/A' column.
1 Service quality is a key corporate value for Unilever (with associated goals, action programmes, measurement and top-level accountabilities) Unilever keeps promises and has superb service recovery systems in place Unilever consistently delivers customer service through single points of contact The processes & systems that Unilever has put in place are designed from a customer's viewpoint and are 'fit for purpose' The people I deal with at Unilever are empowered The people I deal with at Unilever are competent at dispensing their service The people I deal with at Unilever are consistent and reliable
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N/A
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APPENDIX VI: CANNONDALE AND ADVANTAGE SURVEYS
SURVEY (year)
Customer comments I’ve asked them (Unilever) to be a little bit more flexible, earlier collaboration, being more open and not so policy driven. Sometimes we’ve had discussion and it is a policy to policy situation – my company says this way and mine says this, and that’s frustrating.” “They (Unilever) are regimented in their menus and they could embrace more of a collaborative type discussion vs. here are the rules and regulations and if you do this you get this. “One thing that I will say about Unilever is that they are much more transparent with us. With P&G, we get their agenda and it seems like they are trying to squeeze the most out us whereas Unilever is much more transparent and trying to listen.” “My view on Unilever is that they continue to be in a state of significant transition. They are looking to redefine who they are and follow P&G and create mega brands to create greater consumer support. Everybody wants to be like Tide, but right now it is all still transitional.” “Three or four years ago their churn was so bad that it actually got confrontational with us. They have made a lot of progress since then.” “I would say that the longevity on Unilever’s customer’s teams has improved by at least 50% and it’s paying dividends across the board.” The ability to make decisions quickly is paramount. Unilever has gotten better here, but they are still lagging behind across the board.” “They have a huge issue in terms of not having enough sales staff. They have one person who handles schematics, sales and analysis, which we share with two other categories, even though they have skin, DEO, and HBL with us. By contrast, P&G has Face only and they have a dedicated salesperson, a dedicated analyst and a shared schematics person.” “A big reason there was a gap in Unilever’s insights translating to action at retail was the churn on the customer teams – that’s been responsible for that. Now with more continuity on Unilever’s customer team they have much better connectivity internally and their insights are being translated much more effectively into actions that benefit us and the category.” “What Unilever does is bring some really great insights in and say this is what the customer is thinking and then we get the same old, same old recommendation so there is no real translation of those insights into anything different.” “In terms of tools, General Mills and Kraft are at the forefront. They have elasticity tools and behavioral tools. I haven’t seen a lot of that from Unilever.” “General Mills is great to work with. While I applaud Unilever for trying to find solutions to their cross category promotions, we don’t need to do that with General Mills. They have the logistics of those promotions locked upthey take care of it on their end.” “I would say that overall Unilever’s shopper marketing programs are pretty effective. I would rank them tied with P&G. One of the things that I think is an advantage for Unilever is that they are more open with the information that we share with them and their analysis of it. Sometimes I feel like we need to pull the information out of P&G.” ‘Our overall business relationship with Unilever (H&B) has been good historically. However, we have had some challenges that we have put to them which have not always been met with enthusiasm and the willingness to work with us.’ ‘Our overall business relationship with Unilever Household has changed essentially as the year has gone by. We started off very well and traded very well with them, however, there have been some ups and downs and as a result we think that, where we are at the moment, it has gone from being collaborative to transactional.’ ‘Our overall business relationship with Unilever Ice Cream is pretty aligned. They are a good account team.’ ‘Unilever's (H&B) supply chain has been disappointing this year in terms of their communication from them to us. Their communication from their factory to them has not been where it has needed to be in certain promotional activities and product launches, however, that is a bit driven by us not giving them the visibility of forecasts that they need to build the stock. Overall, together we need to work better to understand the capabilities of the factory and what lead times they need to work to, and the disappointing thing is that we do not feel that they have been quite as proactive in driving the bigger volumes, and as brave as we would have hoped, which other suppliers are. That works both ways, and we need to step up our communication as well.’
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ADVANTAGE (2009, Wal*Mart)
CANNONDALE (2008, undisclosed customer)
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‘We do have issues with Unilever's (H&B) supply chain management. One issue is under-forecasting, and a lot of the time when either we or the traders challenge them it sometimes feels like they forecast based on the stock they can deliver to us rather than what they think we are going to sell. Recovery times are probably the other issue; it feels quite long in terms of recovery times. Depending on what it is depends on how quick they are to replenish, but it feels like they don't recover as quickly as some other suppliers. Part of that is the fact that they are a big company and the way their manufacturing works. At the minute we have inbound issues and it is going to be several weeks before that actually recovers in our stores - so it feels like recovery isn't as quick as some other companies.’ ‘In terms of promotions, Unilever Household are hit and miss. Sometimes, if we have just had a meeting they will give us loads of details of how to help us, but for other promotions we will be left to our own devices, so it is not really consistent.’ ‘We would describe our overall relationship with Unilever Foods as poor - we don't think we have a relationship. We don't think they recognise our trading strategy at all. With the product groups that we work with them on, it is our view that they have chosen their trading partner (and it is not Asda) and that they are working hard with that trading partner to grow share.’ The one thing Unilever Ice Cream should do is regarding their account management. For the size of their business and the importance of us to them, we don't think the account role is high enough in their business.’ ‘With regard to having authority to make decisions, the frustration is sometimes that our equivalents at Unilever Ice Cream have to go and ask the question afterwards, so are we dealing with the decision-maker? We are not always convinced. It's an incredibly lengthy process.’ ‘Our overall business relationship with Unilever Foods is poor. They have just forced through an unjustified cost increase and they are just not aligned with what we want to try and do - they say they are, but they are not.’ ‘We do not hear from the account management team at Unilever Foods for weeks and then they will pop up from somewhere (generally it is for a cost price increase). So we do not have that ongoing communication where we have the confidence that they are managing their business as they should do.’ ‘The personnel at Unilever Foods are worse than most for making productive visits, but they are going through a change in personnel so hopefully that will improve. When they recruit a new team, that new team should work very hard to try and repair the relationship which has been damaged by the previous team. There might be a fresh change coming.’ ‘The trade marketing from Unilever Ice Cream is hard work. We have to push them, but that is the case with all of the bigger suppliers. They are not going to come to the table and say "there you are" - it is a more-for-more strategy.’ Unilever Ice Cream's logistics and supply chain management are generally good, but they have recently had quite a big hiccup at one of their sites so it has been quite challenging. We think it has had a knock-on effect and we are still not getting the service that we would expect from such a large supplier. Things are not improving as yet, although the issue with the distribution has improved. However, even though we are getting the loads that we want, unfortunately within those loads we are not getting certain lines, which is affecting our availability.’
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doc_618988930.pdf
Business-to-business (B2B) describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer.
MBA UNILEVER PROJECT REPORT
APPRAISAL OF UNILEVERs B2B SERVICING PERFORMANCE
Report by: Winnie Muriithi (Executive MBA student, University of Warwick) E-mail: [email protected] T (M): + 44 75011 62134.
Executive summary
It has often been argued that World Class service organisations tend to have impressive business results, both financial and non-financial. This report documents research findings of three project objectives framed within this widely held tenet: (a) To determine if Employee Capability & Continuity correlate with Customer Case Fill On Time (CCFOT) and On-Shelf Availability (OSA) (both internal Unilever customer service measures) and (b) To determine the metrics that define World Class Service in a B2B environment (c) To benchmark servicing performance against best-in-class supply chain excellent firms Based on data collated by Institute of Customer Service on Mexico and USA, the research uncovered that; i. ii. CCFOT increases with service capability & continuity and service credibility & commitment, CCFOT improves On-Shelf (which in known to directly impact sales revenues through OSA).
Review of case studies, academic and company reports revealed a lifecycle construct underpinned by three lifecycle stages towards realising world class service status; Foundation, Developing and World Class. Appraisal of customer service performance using; internal, Cannondale and Advantage surveys revealed a geographical split between service perception of UK and USA customers, improvement of employee service continuity and opportunities for improving customer-supplier team working, and service consistency related to promotions. The world class service benchmarking exercise confirmed the role of supplier-customer shared platforms and customer value management in underpinning supply chain excellence. It also revealed that the latter is not contingent upon service excellence in all B2B servicing metrics but rather, leadership in majority of the servicing metrics.
End of Project Report
Chapter 1: Introduction Research demonstrating the causal-effect links between customer service and financial performance in B2C organisations has been widely reported leading to frameworks such as the service profit chain (that describes the virtuous link between profit and world class service), developed by Prof. Hesketh.1 (Appendix I). The profit chain was reframed to generate the Unilever customer value chain (Schematic I) based on the PSO framework pillars and Unilever Customer Service KPIs (described in Appendices II and III, respectively).
Schematic I: Unilever customer service performance value chain linking people, systems & processes and organisation to sales revenue
1.1 Research Goal Defined
Four fundamental questions underpinned the project’s research goal; (a) What is the impact of culture (defined by people and organisation (in the PSO framework)) on the customer value chain? (b) Which metrics define world class service in a B2B environment? (c) How do Unilever strategic customers perceive customer service performance? (d) What are the service hallmarks of companies featuring in AMR’s best-in-class supply chain rankings?
Heskett, J. L., Sasser, W. E. Jr and Schlesinger, L. A. (1997), The Service Profit Chain: How leading Companies Link Profit and Growth to Loyalty, Satisfaction and Value, Free Press, New York, NY. W. Muriithi (February 2010) 2|P a g e
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1.2 Research methodology
Research on the metrics that shape and inform world class service in a B2B environment entailed distillation of published literature, AMR research and Institute of Customer Services’ reports, augmented by interviews with academic thought leaders and AMR research experts. ICS ServCheck data collected between Q1 and Q2’09 was retrieved from ICS data archives. Customer service KPIs data (CCFOT, OSA and constituent loss tree components) for April, May and June was averaged to derive single Q2 2009 values. Statistical analysis was performed using JMP (a visual and interactive interface to SAS)2. The software enables one to interactively link data spreadsheets with analysis and display graphics, to derive data associations and trends. Both multivariate and univariate statistical analysis approaches were used to generate correlation graphs.
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Chapter 2: Results & Discussion
2.1 Objective 1: To determine if Employee Capability & Continuity correlate with Customer Case Fill On Time (CCFOT) and On-Shelf Availability (OSA)
The correlations existing between the customer service KPIs (CCFOT and OSA), people KPIs (capability and continuity) and sales revenue are summarised in the schematic below.
Correlations between ICS ServCheck people scores, Customer Service KPIs (CCFOT and OSA) and sales revenue. +ve correlation indicates that increasing the value of one relation improves the other, -ve correlation signifies that increasing the value of one decreases the other. Further analyses of the correlations between the Organisation pillar (defining service commitment and credibility) were also progressed. The inferences drawn from all the correlations are summarised in the table below.
KPI People Capability/ Continuity Organisation Credibility/ Commitment
Data source ICS ServCheck UL dashboard (USA and Mexico data) ICS ServCheck UL Dashboard (USA and Mexico data)
Inferences Improving service capability and continuity improves: • • CCFOT by 1:0.9 (capability:CCFOT) CCFOT by 1:1 (continuity:CCFOT)
Improving an organisation’s service credibility and continuity improves: • CCFOT by 1.9:1 (commitment: CCFOT) above a commitment score of 40 • CCFOT by 2.19:1 (credibility: CCFOT) above a credibility score of 45
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CCFOT CCFOT OSA
UL dashboard Pre-determined Pre-determined
Increasing CCFOT improves On Shelf Increasing CCFOT improves sales by a ratio of 11:1 Increasing OSA improves sales by a ratio of 3:1
2.2 Objective 2: To determine the metrics which define World Class Service in a B2B environment
Review of published literature and organisation reports revealed that the B2B customer service metrics are largely anecdotal. To address hte paucity of empirical and practice data in this area, the research focused on two objectives; a) Distilling antecedents and premises reported on B2C organisations operating offering world class to construct a service maturity journey, b) Incorporating ‘a’ above into two interrelated operational excellence disciplines (as depicted in the schematic below); The Performance Pyramid and the Value Chain Leadership debates (discussed in greater detail in Appendix IV). Excellent service = delivering the promise+ providing a personal touch + going the extra mile+ resolving problems well Robert Johnston (WBS).
The Performance Pyramid (causal-effect relationships) Richard Lynch et al.
Value Chain Leadership (supply chain excellence) Debra Hofman (AMR research)
Synthesis of the concepts and debates advanced from the three perspectives allude to metrics for a B2B operating environment that are the result of a maturity journey across the three passages depicted in the schematic below.
The B2B organisation maturity journey towards World Class Customer service status
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Foundation level; the service provider delivers promises as per the agreed written contract, with no excesses beyond what is agreed. The service is, in the main, offering hygiene factors only. Developing level; here the service provider goes beyond delivering the basics by putting in place a signature recovery service. Management of this perspective determines whether the service provider tends to world class service status, as poor service recovery mechanisms have a profound adverse impact on perceived service quality. World Class Service; this is the pinnacle of service excellence and is underpinned by, firstly, delivery of the basics coupled to a signature service recovery. In addition, the service proposition nurtures shared customer-service provider platforms, leading to an opportunity for a distinct and branded service - the so-called, ‘service with a personality’. Creating an arena for co-engineering the service-product by drawing on one’s proximity to the service recipient, to shape and mould the service proposition, is, for a service provider, a unique and non replicable source of strategic advantage. When combined with first mover advantage, this strategy has been demonstrated to create B2C service excellent organisations such as Singapore Airlines.
2.3 Objective 3: To benchmark servicing performance against that of best-in-class supply chain excellent firms
Wal*Mart Customer Survey Customer views on Unilever performance were elicited from four senior leaders drawn from Wal*Mart International using the survey shown in Appendix V. The results have been analysed using the ImportancePerformance matrix mapping (see graph below), a powerful tool for appraising service performance because it explicitly includes ‘the customer voice’ concerning both service satisfaction and service importance.
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The results revealed two performance/importance clusters assignable to country – USA and UK (see graph below). The USA cluster falls within the appropriate weighting of both importance and satisfaction whilst UK scores are borderline (averaging 5 for both importance and performance). A notable exception to this general rule of thumb is the perception by customers that staff servicing competence (highlighted in black), leaves room for improvement confirming the need for immediate corrective action to remedy performance shortfall. USA Cannondale & UK Advantage surveys Data on category and supply chain management from Cannondale and Advantage3 surveys has been used to augment the insights of the customer survey reported above. Detailed responses are captured in Appendix VI, with a snapshot of the verbatim provided in the table below.
World Class Service maturity dimension Service personality Customer performance appraisal verbatim I’ve asked them (Unilever) to be a little bit more flexible, earlier collaboration, being more open and not so policy driven. Sometimes we’ve had discussion and it is a policy to policy situation – my company says this way and mine says this, and that’s frustrating.” (Cannondale) Service personality ‘Our overall business relationship with Unilever (H&B) has been good historically. However, we have had some challenges that we have put to them which have not always been met with enthusiasm and the willingness to work with us.’ (Advantage) Shared platforms “I would say that overall Unilever’s shopper marketing programs are pretty effective. I would rank them tied with P&G. One of the things that I think is an advantage for Unilever is that they are more open with the information that we share with them and their analysis of it. Sometimes I feel like we need to pull the information out of P&G.” (Cannondale) Shared platforms ‘‘In terms of promotions, Unilever Household are hit and miss. Sometimes, if we have just had a meeting they will give us loads of details of how to help us, but for other promotions we will be left to our own devices, so it is not really consistent.’ (Advantage) Delivering basics/ recovery the ‘We do have issues with Unilever's (H&B) supply chain management. One issue is underservice forecasting, and a lot of the time when either we or the traders challenge them it sometimes feels like they forecast based on the stock they can deliver to us rather than what they think we are going to sell. Recovery times are probably the other issue; it feels quite long in terms of recovery times. Depending on what it is depends on how quick they are to replenish, but it feels like they don't recover as quickly as some other suppliers. (Advantage) Delivering basics the “Three or four years ago their churn was so bad that it actually got confrontational with us. They have made a lot of progress since then.” The ability to make decisions quickly is paramount. Unilever has gotten better here, but they are still lagging behind across the board.” (Cannondale)
The Cannondale and Advantage groups are research consultancy practices based in USA and UK respectively that collate proprietary and extensive qualitative and quantitative market data on business critical performance dimensions of FMCGs and retailers. W. Muriithi (February 2010) 7|P a g e
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The customer responses substantiate the shortfalls noted from the Wal*Mart survey, underlining the need for corrective action in the following performance areas: (i) Service personality; there is an unmet need of service flexibility and collaboration which is attributable to bureaucracy and lack of trust. (ii) Shared platforms; comment (i) echoes the assessment of this perspective that, in the main, whilst information sharing between Unilever and USA customers is rated highly, there is a need to increase consistency in other areas such as promotions in the UK. (iii) Delivering the basics; this perspective attracted mixed responses with UK customers highlighting forecasting and service recovery deficits, and USA customers acknowledging significant improvements especially with respect to staff capability. In summary, the three surveys confirm a geographical split between service perception of UK and USA customers, extremities of poor customer service interlaced with an acknowledgement of progress in staff continuity and capability. Servicing (Organisation & People) within the Top50 Supply Chain Excellent firms Benchmarking of people/ organisation servicing metrics of a select group of firms drawn from AMR research Top50 supply chain rankings, are summarised in the table below.
The research revealed that firms ranked 20 and above;
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a) Are on average leading-edge in customer value management either as mainstream activities or as part of account management. These firms are also fanatical about supply chain health by having in place supply chain health sensors. b) Have, with the exception of P&G, supplier-customer collaboration platforms. These include (but are not limited to); channel alignment activities such as vendor managed inventories, electronic data interchange (EDI), echelon-based inventory control and continuous replenishment programs. c) Combine (with the exception of Colgate), customer, partner, and internal insights to identify innovations that address true market needs. The research also uncovered that firms positioned below 22 in the rankings have, in the main; i) no supplier-customer supply chain collaborative activities, product design & development servicing and supply chain health metrics, and ii) are moderate/ at par performers across majority of the servicing metrics,
All firms use downstream data mining to deliver their services suggesting that the latter is a hygiene factor, rather than a source of competitive advantage.
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Chapter 3: Conclusions (i) Recruiting and developing people against competencies that give high priority to customer-focused attitudes, and using retention, reward and recognition strategies that are focused on world-class service, improves CCFOT. • • (ii) By 1:0.9 (Capability:CCFOT) By 1:1 (Continuity:CCFOT)
Defining service quality as a key corporate value with associated goals, action programmes and measurement and top-level accountabilities, and ensuring that promises are kept and superb service recovery systems are in place, improves CCFOT. • • By 1.9:1 (commitment: CCFOT) based on a minimum ICS ServCheck commitment score of 40 By 2.19:1 (credibility: CCFOT) based on a minimum ICS ServCheck credibility score of 45
(iii) Improving CCFOT improves On-Shelf which directly impacts OSA and therefore, sales revenues. The research mapped out the antecedents and premises relating to World Class Service credentials in a B2B operating environment. These postulate that attaining world class service credentials is a culmination of a maturity journey across three passages: foundation, developing and world class service stages, defined by the following metrics: delivers promises (contract), signature service recovery, shared (customer-supplier) supply chain platforms and service personality. Appraisal of customer service performance against the world class service framework revealed that whilst significant gains had been made in delivering employee service continuity, there remains significant performance deficits with respect to collaborative and flexible customer-supplier team working, and service consistency (especially during promotions). The world class service benchmarking exercise confirmed the role of supplier-customer shared platforms and customer value management in underpinning supply chain excellence. It also revealed that the two practices are necessary but not sufficient for attaining world class service status, in B2B operating contexts.
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APPENDIX I: SERVICE PROFIT CYCLE
Research demonstrating the causal-effect links between customer service and financial performance in B2C organisations has been widely reported1-5. These studies have resulted into frameworks such as the ‘service profit chain’ (which describes the virtuous circle that links profit and growth to loyalty, satisfaction and value), and World Class Service (which describes the concept of a signature service that is a source of competitive advantage). The basic premise of the Service Profit Chain shown below is that employee (&customer) loyalty are linked to satisfaction which in turn drives profit and growth4. This proposition has been corroborated using data from B2C contexts including, notably, research on the four largest UK supermarkets5, UK retail banking6 and the American retail giant, Sears7.
Schematic 2: The service profit chain linking employee and customer satisfaction & loyalty to sales revenue
Heskett, J. L., Sasser, W. E. Jr and Schlesinger, L. A. (1997), The Service Profit Chain: How leading Companies Link Profit and Growth to Loyalty, Satisfaction and Value, Free Press, New York, NY. 5 Silvestro, R. (2002), International Journal of Operations & Production Management, Dispelling the modern myth, 22, (1) pp 30-49. 6 Loveman, G. W (1998), Journal of Service, Employee satisfaction, customer loyalty and financial performance: an empirical examination of the service profit chain in retail banking, 1, (1) pp 18-31 7 Rucci, A. J., Kirn, S. P. And Quinn, R. T., (1998), Harvard Business Review, The employee-customer-profit chain at Sears, January-February, pp 83-97. W. Muriithi (February 2010) 11 | P a g e
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APPENDIX II: THE INSTITITE OF CUSTOMER SERVICES PSO FRAMEWORK
The Institute of Customer Services (ICS) based in Colchester UK is a non-governmental organisation concerned with world-class service advocacy. From collaborative research with leading academic institutions, the organisation has accumulated a body of knowledge on world class service delivery, leading to the PSO framework (shown below in the schematic below). It’s guiding principle is that service delivery is the cumulative performance about three service pillars; people, systems & processes and organisation, each of which is shaped and informed by two component principles; capability & continuity, consistency & creativity and credibility & commitment, respectively.
Definition of the components is summarised in the table below. Pillar Organisation Principle Commitment Definition Service quality is a key corporate value, with associated goals, action programmes, measurement and top-level accountabilities Promises are kept and superb service recovery systems are in place People are recruited and developed against competencies that give high priority to customer-focused attitudes Retention, reward and recognition strategies focus on world-class delivery Processes are designed from a customer’s viewpoint and are consistently delivered Continuous improvement and innovation are nurtured and encouraged to flourish
Credibility Capability
People
Continuity Consistency
Systems & Processes
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APPENDIX III: UNILEVER SUPPLY NETWORK
Unilever Supply network is a complex interconnection of customer, supplier, and internal function values chains as depicted in the schematic below. The supply network underlines the multiplicity of potential instability positions, and the interdependencies between the three value chains: customer, product manufacturing and supplier. The effectiveness and efficiencies of the network determines the impact that Unilever products have on the supermarket shelf, on the consumer and ultimately, on sales revenue. Customer Value Chain During the last 5 years, Unilever’s Customer Value Chain (CVC) performance has assumed strategic importance following the launch of Unilever’s corporate strategy in 2005. Enshrined in this strategy was the thrust ‘Win with Customers’, which focuses on delivering best in class customer service through an efficient shopper-driven supply chain. Two principal KPIs have been launched to measure service performance; Customer Case Fill on Time (CCFOT)8 and On Shelf Availability (OSA)9.(see schematic below).
Unilever Supply Network and Customer Service KPIs (CCFOT and OSA) CCFOT This is the order to deliver process measure which is used alongside a Loss Tree tool that captures failures of delivering to customers on time. The aggregated total is 100% i.e., CCFOT% + Loss Tree % = 100% CCFOT = Total Cases Accepted by Customer On-Time/ Adjusted number of cases ordered Where adjusted cases ordered is defined as: Adjusted Number of Cases ordered = Revised Order + Order Changes
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Unilever Information Standard, Customer Casefill On Time – CCFOT, Version 1.1, June 2008 Unilever Information Standard, On Shelf Availability, Version 1.0, December 2008 W. Muriithi (February 2010) 13 | P a g e
Loss tree comprises level 1 measures of: stock availability, order management, warehouse & transportation, commercial issues on time, customer related issues and Force Majeure. OSA OSA is an in-store measure of the consumer units present (or absent) from a shelf space. Its subcomponents are: On-Shelf (OS), Out-Of-Stock (OOS) and VOID where; OS are the % consumer units (per listed consumer units), that can be found on the shelf at the time of audit, OOS are the % consumer units that have a shelf tag or are in the store catalogue, but do not have any inventory on shelf at the time of audit and VOID, is a circumstance where a consumer unit is included in the store assortment and is expected to be stocked, but at the time of audit there is no inventory of it nor a shelf tag or any reference in the store catalogue or retailer system. The three when aggregated give 100% i.e. OS% + OOS% + VOID% = 100% In-house research has established that increasing CCFOT by 11%, or OSA by 3%, leads to a 1% rise in sales10.
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Personal Communication with Customer Service Development (OSA program) Director, September 2009. W. Muriithi (February 2010) 14 | P a g e
APPENDIX IV: EVOLUTION OF THE SERVICE EXCELLENCE PYRAMID
The world class maturity pyramid was generated about three operations excellence disciplines: Excellent service = delivering the promise+ providing a personal touch + going the extra mile+ resolving problems well Service Excellence as postulated by Prof. Robert Johnston (Warwick Business School)11 is based on in-depth qualitative studies of Singapore Airlines, Sears, Roebuck and Co., British Airways, Shangri-La Hotels, First Direct, Disney, Virgin Atlantic, Tesco and RAC, and quantitative studies of 100 UK service organisations. Its basic premise is that service excellence is the cumulative result of delivering the promise, proving a personal touch, going the extra mile and resolving problems well. Performance Pyramid advanced by Lynch et al.12, advocates for constructs comprising measures that are interlinked to expedite decision making and allow robust interpretation of causal-effect relationships. Layering the measures also improves implementation efficacy whilst flagging improvement gaps needed for continuous process improvement. Value Chain leadership, advanced by AMR Research13, draws on a spider gram construct that depicts supply chain leadership as contingent upon four supply chain excellence levers; supply, product, demand and information. Effectiveness of these levers is reliant upon customer service behaviours and competencies such as: shared service, supply network focus, collaboration for joint value creation, integration of service into product design & development, service parts optimization and shared ownership & metrics.
The Performance Pyramid (causal-effect relationships)
Value Chain Leadership (supply chain excellence)
The Excellent Service paradigm draws primarily on data from B2C organisations and to achieve B2B contextual relevance, has been augmented by the Value Chain Leadership paradigm based on both B2B and B2C businesses.
Johnston, R. Clark, G. (2008) Service Operations Management, Pearson Education Limited, Harlow, England Lynch, Richard, L. And Kelvin, Cross, F. (1991), Measure Up! Yardsticks for Continuous Improvement, Blackwell, Oxford. 13 American Manufacturing Research (AMR in short) is a professional consultancy organisation based in Boston, USA who primary goal is to advance thought leadership and practice in supply chain excellence.
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APPENDIX V: CUSTOMER SURVEY QUESTIONNAIRE
UNILEVER CUSTOMER SERVICE EXCELLENCE SURVEY Please be as candid as possible as the questionnaires will be treated with the strictest confidence. The questionnaire should take no more than 10 minutes to complete. Country Affiliation Which country are you affiliated with?
United Kingdom
Functional Area In which functional area do you work? Commercial (contract negotiation and supplier management) Commercial (supply chain logistics and planning) Finance (accounts payable and invoicing) Retail Warehousing (goods dispatch, transportation and goods receipt) Other Primary Operating Hub Which is your primary operating hub? Corporate/ Business centre Distribution Centre Store Other Job Role Which of these categories best describes your job role? Senior Vice President Vice President Director 16 | P a g e W. Muriithi (February 2010)
Manager / Team Leader / Supervisor Assistant / Associate Other Importance On a scale of 1 (low) to 10 (high), how important are the following aspects of your relationship with Unilever?
1 Competence of staff Being treated as a valued customer Consistency of staff interactions On time delivery of contract / promises Resolution of problems and issues Quality of Information / advice Handling of enquiries Being consulted about product and service needs Ease of doing business with Other (If selected, please insert text) Satisfaction
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5
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On a scale of 1 (low) to 10 (high), how satisfied are you with the following aspects of your relationship with Unilever?
1 Competence of staff Being treated as a valued customer Consistency of staff interactions On time delivery of contract / promises Resolution of problems and issues
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Quality of Information / advice Handling of enquiries Being consulted about product and service needs Ease of doing business with Other (If selected, please insert text) Improving the relationship with you What (in your view) should Unilever (as an organization) do to improve its relationship with you personally?
Improving the relationship with XXXX What (in your view) should Unilever (as an organization) do to improve its relationship with XXXX?
Overall rating We'd like you to score the following items using a scale of 1 to 10, where 1 means "Completely disagree" and 10 means "Completely agree". If you have no experience relating to the comment please click the 'N/A' column.
1 Service quality is a key corporate value for Unilever (with associated goals, action programmes, measurement and top-level accountabilities) Unilever keeps promises and has superb service recovery systems in place Unilever consistently delivers customer service through single points of contact The processes & systems that Unilever has put in place are designed from a customer's viewpoint and are 'fit for purpose' The people I deal with at Unilever are empowered The people I deal with at Unilever are competent at dispensing their service The people I deal with at Unilever are consistent and reliable
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APPENDIX VI: CANNONDALE AND ADVANTAGE SURVEYS
SURVEY (year)
Customer comments I’ve asked them (Unilever) to be a little bit more flexible, earlier collaboration, being more open and not so policy driven. Sometimes we’ve had discussion and it is a policy to policy situation – my company says this way and mine says this, and that’s frustrating.” “They (Unilever) are regimented in their menus and they could embrace more of a collaborative type discussion vs. here are the rules and regulations and if you do this you get this. “One thing that I will say about Unilever is that they are much more transparent with us. With P&G, we get their agenda and it seems like they are trying to squeeze the most out us whereas Unilever is much more transparent and trying to listen.” “My view on Unilever is that they continue to be in a state of significant transition. They are looking to redefine who they are and follow P&G and create mega brands to create greater consumer support. Everybody wants to be like Tide, but right now it is all still transitional.” “Three or four years ago their churn was so bad that it actually got confrontational with us. They have made a lot of progress since then.” “I would say that the longevity on Unilever’s customer’s teams has improved by at least 50% and it’s paying dividends across the board.” The ability to make decisions quickly is paramount. Unilever has gotten better here, but they are still lagging behind across the board.” “They have a huge issue in terms of not having enough sales staff. They have one person who handles schematics, sales and analysis, which we share with two other categories, even though they have skin, DEO, and HBL with us. By contrast, P&G has Face only and they have a dedicated salesperson, a dedicated analyst and a shared schematics person.” “A big reason there was a gap in Unilever’s insights translating to action at retail was the churn on the customer teams – that’s been responsible for that. Now with more continuity on Unilever’s customer team they have much better connectivity internally and their insights are being translated much more effectively into actions that benefit us and the category.” “What Unilever does is bring some really great insights in and say this is what the customer is thinking and then we get the same old, same old recommendation so there is no real translation of those insights into anything different.” “In terms of tools, General Mills and Kraft are at the forefront. They have elasticity tools and behavioral tools. I haven’t seen a lot of that from Unilever.” “General Mills is great to work with. While I applaud Unilever for trying to find solutions to their cross category promotions, we don’t need to do that with General Mills. They have the logistics of those promotions locked upthey take care of it on their end.” “I would say that overall Unilever’s shopper marketing programs are pretty effective. I would rank them tied with P&G. One of the things that I think is an advantage for Unilever is that they are more open with the information that we share with them and their analysis of it. Sometimes I feel like we need to pull the information out of P&G.” ‘Our overall business relationship with Unilever (H&B) has been good historically. However, we have had some challenges that we have put to them which have not always been met with enthusiasm and the willingness to work with us.’ ‘Our overall business relationship with Unilever Household has changed essentially as the year has gone by. We started off very well and traded very well with them, however, there have been some ups and downs and as a result we think that, where we are at the moment, it has gone from being collaborative to transactional.’ ‘Our overall business relationship with Unilever Ice Cream is pretty aligned. They are a good account team.’ ‘Unilever's (H&B) supply chain has been disappointing this year in terms of their communication from them to us. Their communication from their factory to them has not been where it has needed to be in certain promotional activities and product launches, however, that is a bit driven by us not giving them the visibility of forecasts that they need to build the stock. Overall, together we need to work better to understand the capabilities of the factory and what lead times they need to work to, and the disappointing thing is that we do not feel that they have been quite as proactive in driving the bigger volumes, and as brave as we would have hoped, which other suppliers are. That works both ways, and we need to step up our communication as well.’
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ADVANTAGE (2009, Wal*Mart)
CANNONDALE (2008, undisclosed customer)
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‘We do have issues with Unilever's (H&B) supply chain management. One issue is under-forecasting, and a lot of the time when either we or the traders challenge them it sometimes feels like they forecast based on the stock they can deliver to us rather than what they think we are going to sell. Recovery times are probably the other issue; it feels quite long in terms of recovery times. Depending on what it is depends on how quick they are to replenish, but it feels like they don't recover as quickly as some other suppliers. Part of that is the fact that they are a big company and the way their manufacturing works. At the minute we have inbound issues and it is going to be several weeks before that actually recovers in our stores - so it feels like recovery isn't as quick as some other companies.’ ‘In terms of promotions, Unilever Household are hit and miss. Sometimes, if we have just had a meeting they will give us loads of details of how to help us, but for other promotions we will be left to our own devices, so it is not really consistent.’ ‘We would describe our overall relationship with Unilever Foods as poor - we don't think we have a relationship. We don't think they recognise our trading strategy at all. With the product groups that we work with them on, it is our view that they have chosen their trading partner (and it is not Asda) and that they are working hard with that trading partner to grow share.’ The one thing Unilever Ice Cream should do is regarding their account management. For the size of their business and the importance of us to them, we don't think the account role is high enough in their business.’ ‘With regard to having authority to make decisions, the frustration is sometimes that our equivalents at Unilever Ice Cream have to go and ask the question afterwards, so are we dealing with the decision-maker? We are not always convinced. It's an incredibly lengthy process.’ ‘Our overall business relationship with Unilever Foods is poor. They have just forced through an unjustified cost increase and they are just not aligned with what we want to try and do - they say they are, but they are not.’ ‘We do not hear from the account management team at Unilever Foods for weeks and then they will pop up from somewhere (generally it is for a cost price increase). So we do not have that ongoing communication where we have the confidence that they are managing their business as they should do.’ ‘The personnel at Unilever Foods are worse than most for making productive visits, but they are going through a change in personnel so hopefully that will improve. When they recruit a new team, that new team should work very hard to try and repair the relationship which has been damaged by the previous team. There might be a fresh change coming.’ ‘The trade marketing from Unilever Ice Cream is hard work. We have to push them, but that is the case with all of the bigger suppliers. They are not going to come to the table and say "there you are" - it is a more-for-more strategy.’ Unilever Ice Cream's logistics and supply chain management are generally good, but they have recently had quite a big hiccup at one of their sites so it has been quite challenging. We think it has had a knock-on effect and we are still not getting the service that we would expect from such a large supplier. Things are not improving as yet, although the issue with the distribution has improved. However, even though we are getting the loads that we want, unfortunately within those loads we are not getting certain lines, which is affecting our availability.’
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